January 04, 2021

COVID-19: Expiration of the FFCRA/Extension of the Payroll Tax Credit

When the Families First Coronavirus Response Act (FFCRA) was signed into law on March 18, 2020, its requirement for employers to provide paid leave to employees affected by COVID-19 was set to expire on December 31, 2020.  While it was thought that the federal government would potentially extend the FFCRA due to the continued danger posed by the pandemic, the recently signed Consolidated Appropriations Act, 2021 stimulus package did not do so.  As such, the FFCRA expired on December 31, 2020. Employers must now assess how to address the ongoing pandemic and how to protect employees entering 2021.

Under the FFCRA, covered employers were required to potentially provide two types of paid leave (Emergency Paid Sick Leave and/or Emergency Family Medical Leave) to employees that qualified under one or more of six qualifying reasons.  Such employees were entitled to a maximum amount of 80 hours of EPSL leave, and up to an additional ten weeks of EFMLEA leave.  In return for providing this leave, the FFCRA also permitted employers a full tax credit against payroll taxes to reimburse for these payments.  The paid leave under the FFCRA permitted employees some level of protection if they contracted the disease, were forced to quarantine after potential exposure, or had to care for a child or loved one. 

With the expiration of the FFCRA, employers are no longer required to provide paid EPSL or EFMLEA leave to employees.  However, employees will likewise no longer have the protection it afforded in the event of potential COVID-19 exposure.  As many employees are unable to financially afford to miss long periods of work in order to quarantine, there is now fear that employees may refuse to report potential COVID-19 exposures and continue to report to work.  This, in turn, increases the risk that the disease will be spread to other employees while at work and potentially subjecting the employer to the liability that may result from such a work-related exposure.

Fortunately, the stimulus package did provide some assistance to employers in this regard.  The package did extend the payroll tax credits to cover payments of leave through March 31, 2021.  This permits employers to continue to voluntarily offer paid leave consist with the FFCRA and still be reimbursed for these payments, at least for the next three months.  The law did not change the amount of the payments, nor any of the six qualifying reasons.  Continued offering of reimbursable paid leave consistent with the FFCRA is one cost-effective way of trying to address this problem.  Whether an employer chooses to avail itself of this option or not, it is recommended that it put a protocol in place to address employees that will need to quarantine in the future due to COVID-19 as this will continue to be a threat to the health and safety of employees into the near future.

If you have any questions on the expiration of the FFCRA, the extension of the payroll tax credits, or future actions that employers can take to protect against the ongoing COVID-19 pandemic, please contact one of the attorneys in our Employment Law Group at 1-888-488-2638.